Should staff who earn tips be paid less?

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Minimum Wage for Employees Who Receive Tips If your employees regularly earn tips from customers, you might be able to pay them less than the minimum wage, Federal law allows employers to pay a special hourly rate to tipped workers, as long as they earn enough in tips to make at least minimum wage for each hour worked.

Under Wyoming law, employers with tipped employees must pay at least $2.13 per hour, provided the employees’ pay equals at least the applicable minimum hourly wage when combined with the tips they receive during a given pay period.

The tipped wage is base wage paid to an employee that receives a substantial portion of their compensation from tips. According to a common labor law provision referred to as a "tip credit", the employee must earn at least the state's minimum wage when tips and wages.

As Republicans stonewall President Obama’s initiative to raise the federal minimum wage from $7.25 an hour to $10.10 an hour by 2016, some state lawmakers have taken the matter into their own.

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Tipped Employees (earning more than $30 per month in tips) must earn the State Minimum Wage Rate per hour. Employers must pay at least $3.63 per hour.

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The net pay includes only the credit card tips not previously paid out in cash and does not include the cash tips that the employees have already pocketed. The payroll service will also deduct $4,517 for employee and employer payroll taxes.

Some workers earn an hourly service rate, plus tips.. does not add up to at least the minimum wage, the employer must pay the difference.

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Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA.